HealthLawProf Blog

Editor: Katharine Van Tassel
Case Western Reserve University School of Law

Monday, November 27, 2023

The 340B Drug Pricing Program: Litigation, Administration, and Reform

Ryan Knox (Harvard-MIT Center for Regulatory Science), Ameet Sarpatwari (Harvard Medical School), The 340B Drug Pricing Program: Litigation, Administration, and Reform, Okla. L. Rev. (forthcoming 2023):

The 340B Drug Pricing Program supports hospitals and safety net clinics caring for low-income and underserved populations by discounting the price of the outpatient drugs they purchase. These “covered entities” can in turn charge insurers market rates for the drugs and use the resulting profits to subsidize operational costs and fund additional health care services that would otherwise not financially possible.

Since its implementation, the 340B Program has grown substantially, sparking criticism and allegations of misuse. However, the limited authority of the Health Resources and Services Administration (HRSA), the agency within the Department of Health and Human Services tasked with overseeing the 340B Program, has impeded reforms. In recent years, several lawsuits have narrowed HRSA’s rulemaking and enforcement powers still further.

Using past and current cases, this Article highlights limitations to HRSA’s oversight of the 340B Program and recommends enhanced rulemaking powers, clearer enforcement authority, and a revised administrative dispute resolution process to strengthen HRSA’s ability to administer the 340B Program and ensure it operates as Congress intended. Recent trends in administrative law underscore the need for Congress to enact these reforms quickly. Absent prompt action, the future of the 340B Program may be at risk.

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